Wednesday, July 29, 2009

Plain truth

Take a look.

Saturday, July 25, 2009

The Record of the Federal Reserve

The Federal Reserve System is fraudulent. Whatever its stated purpose, its effective purpose is to create a mechanism of deficit spending by politicians, through the insidious invisible taxation of monetary debasement (aka inflation). With printed money, the Government can buy services for its voters before the effects of inflation are felt. It is then the voters whose money buys less the following year, as the new money has raised prices, and they are none the wiser.
See why. (Short article)

Friday, July 24, 2009

Current Recession Is a Severe Credit Bust of Depression-Era Magnitude

This time it is different, very different, as the author says...
There's a big difference between inventory-driven recessions and credit-driven recessions. An inventory recession is caused by a mismatch between supply and demand. It's the result of overcapacity and under-utilization which can only work itself out over time as inventories are pared back and demand builds. Credit-driven recessions are a different story altogether. They typically last twice as long as and can precipitate financial crises. The current recession is a severe credit bust of Depression-era magnitude.

The financial system has effectively melted down. The wholesale credit system (securitization) is frozen, the banking system is dysfunctional and insolvent, and consumer spending has tanked. The Fed's multi-trillion dollar lending facilities and monetary stimulus have kept the financial system from grinding to a halt, but the underlying problems still persist. Fed chairman Ben Bernanke has chosen to avoid the hard decisions and keep the price of toxic assets artificially high with the help of a $12.8 trillion liquidity backstop. That's why stocks have rallied for the last 4 months while conditions in the real economy have steadily deteriorated. Bernanke is using all the tools at his disposal to keep the market from clearing and prevent the mountain of debt that has built up over decades from being purged from the system. Unfortunately, as Ludwig von Mises said, "There is no means of avoiding the final collapse of a boom brought on by credit expansion."
Full article.

Wednesday, July 22, 2009

What went wrong with economics

Of all the economic bubbles that have been pricked, few have burst more spectacularly than the reputation of economics itself.
It's quite simple really.

Like the geocentric view of Earth for 2000 years,
the govcentric view of human action (the economy)
will be found grossly wanting. The cracks are
appearing when one of the world's premier economic's
rags hasn't found their Copernicus.

Here's your wake-up call, boys an' girls.

See the full article.

Monday, July 20, 2009

The Dying State

No doubt Ireland has been the victim of a savagely tight monetary policy e_SEmD given its specific needs. But the deeper truth is that Britain, Spain, France, Germany, Italy, the US, and Japan are in varying states of fiscal ruin, and those tipping into demographic decline (unlike young Ireland) have an underlying cancer that is even more deadly. The West cannot support its gold-plated state structures from an aging workforce and depleted tax base. [My emphasis]

Wednesday, July 15, 2009

The Collective is now supreme. You'd better run until the dust settles.

"The people who promote these governmental programs," I go on, "are destroying the world in which your children and grandchildren will live. Why do you giggle about this?"

The answer, I suspect, is to be found in our conditioned practice of identifying our sense of being with institutions. (I dealt with this topic in my first book, Calculated Chaos: Institutional Threats to Peace and Human Survival.) Through schools, churches, the media, corporations, our parents, and various other influences in our development, we train ourselves to look for meaning in our lives not within ourselves, but in external organized systems that have a vested interest in having us elevate their purposes above our own. It is this practice that is the midwife to all forms of collectivism.
...and mass death.


Tuesday, July 14, 2009

The Big Myth of the last century exposed

The Federal Reserve was established in 1913.
We were once told that boom-bust business cycles were a thing of the past because, thanks to the Fed, we now had scientific management of the money supply. If anyone believes that today, I’d like to meet him. Artificially low interest rates courtesy of the Fed do not yield us a utopia of sunshine and kittens. To the contrary, they artificially stimulate capital-goods production and long-term investment. They thereby deform the structure of production into a configuration that the public’s freely expressed pattern of saving and consumption will be unable to sustain. When this phony boom inevitably collapses, it is "capitalism" that takes the blame – when in fact the Fed, a non-market institution, is the culprit.
Whole essay.

Friday, July 10, 2009

The free market doesn't live on the back of the taxpayer, Warren. Capitalism does.

Another statist thinks the state will save his ass...

Watch that fool go down.
WASHINGTON (Reuters) - Legendary investor Warren Buffett said in an interview aired on Thursday unemployment could hit 11 percent and a second stimulus package might be needed as the economy struggles to recover from recession.

Tuesday, July 07, 2009

Credit as money creation

”Doug Noland has for years been pointing out that one of the drivers of the credit bubble has been the ever-broadening definition of money. As the global economy expanded without a hic-up, more and more instruments came to be used as a store of value or medium of exchange or even a standard against which to value other things—in other words, as money. Thus mortgage-backed bonds and even more exotic things came to be seen as nearly risk-free and infinitely liquid. In Noland's terms, credit gained "moneyness," which sent the effective global money supply through the roof. This in turn allowed the U.S. and its trading partners to keep adding jobs and appearing to grow, despite debt levels that were rising into the stratosphere. For a while there, borrowing actually made the world richer, because both the cash received and the debt created functioned as money.”

Friday, July 03, 2009

U.S. durable goods production - June 2009

...and other extreme charts.

Wednesday, July 01, 2009

Shepherds of Illusion

Sadly, history will continue to show that those in positions of great power, elected by various means as prudential stewards of peoples and their economies, continue to prove themselves nothing more than shepherd’s of illusion.

One of the spoils of war enjoyed by victors is the tendency toward rewriting history to better suit their prevailing views. In similar context, once ruling parties secure conquest, when backed up against the wall, the few in control of the many often go to extraordinary measures to quickly modify or rewrite the rule of law in order to preserve the monopoly of dominance over those under their rule.